Page 9 - AsianOil Week 06 2023

AsianOil PIPELINES & TRANSPORT AsianOil

Bangladesh returns to LNG spot market

BANGLADESH BANGLADESHI officials have recently stated (8.5-11.3 mcm) daily through a 10-year contract
that the country is looking to return to the LNG with Oman and a 15-year contract with Qatar. It
The government has spot market now that international prices are is negotiating a contract with Brunei LNG but
made the decision beginning to come down. High prices forced that is not expected to materialise until 2025. The
based on falling Bangladesh to stop tendering for LNG ship- country relies on imported natural gas for some
international prices. ments on the spot market last July when prices three-quarters of its power generation.
were around $70 per mmBtu. Russia’s invasion of Ukraine a year ago sent
Officials from state-owned Rupantarita spot LNG prices soaring and eliminated any sur-
Prakritik Gas Company Ltd (RPGCL) are plus supply as Europe and big Asian consumers
reported to have tendered a spot delivery for late moved to secure their gas requirements. As gas
February and received offers for a shipment at inventories for those countries have climbed in
under $20 per mmBtu. The contract has yet to recent months, prices have begun to come down,
be awarded and the cargo is being sought on a opening the spot market to Bangladesh and
delivered ex-ship (DES) basis on 21-22 February. other countries priced out of the market. There
RPGCL is a subsidiary of state-owned oil are indications that as winter begins to subside
and gas company Petrobanagla, which wants in northern countries, prices may ease further.
to boost gas supply to a number of economic The country’s return to the spot market
sectors such as steel, ceramics and the garment coincides with an anticipated rise in domestic
industry. Demand for natural gas is around demand brought on by Ramadan and the irriga-
3,100mn cubic feet (87.8mn cubic metres) per tion season, as well as summer demand, officials
day, but current supply is around 2,640 mmcf have said.
(74.8 mcm) per day. A domestic financial crunch also contrib-
“We are planning to buy 10 to 12 cargoes uted to Bangladesh dropping out of the LNG
from the spot market until June,” an official spot market. Last month the government hiked
at Petrobangla was quoted by Reuters as say- gas prices by 179% for a number of economic
ing. “Prices are coming down, but they are still sectors in an effort to stop government subsi-
higher than prices we are paying for the long- dies and reduce the fiscal deficit, know that ris-
term deals.” ing demand will need to be met by importing
Bangladesh is importing 300-400 mmcf LNG. ™

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